An decrease in the velocity of money will shift the
A)IS curve up.
B)LM curve up.
C)LM curve down.
D)IS curve down.

Question

Quizplus · Accepted Answer

A decrease in the velocity of money affects the money market, which is represented by the LM curve. It leads to a decrease in the money supply or an increase in the demand for money, both of which result in higher interest rates for any given level of income. This is depicted by an upward shift in the LM curve.

An Decrease in the Velocity of Money Will Shift the